1. Field of the Invention
The present invention generally relates to distinguishing authentic goods from counterfeit goods and, more particularly, to a system for authenticating consumer goods using an electronically authenticatable device attached to goods.
2. Description of the Related Art
Counterfeit or “knock-off” goods costs billions of dollars yearly to companies around the world in lost sales. Many counterfeited products are of inferior quality and therefore may tarnish the reputations of legitimate producers when consumers mistake the counterfeit for the real thing. Even if a counterfeit good is well done, the counterfeiter has avoided any of the expenditures in the research and development or intellectual property concerns incurred by or owed to the legitimate producer. Consumers and producers both suffer from counterfeiting through increased prices for legitimate merchandise and inferior quality of fraudulent merchandise.
Complete prevention against counterfeiting is probably unrealistic, at least for products which are manufactured. Some types of counterfeiting, often of inferior quality, are embraced by some consumers who desire to own, but cannot afford, expensive goods. Also, for products which are easily duplicable with no or little quality loss, some consumers prefer to protect their immediate financial interest rather than the interest of the legitimate producers.
Nevertheless, whether it be for the sake of honesty or because of quality concerns many, if not most, consumers prefer to purchase only authentic merchandise, especially when full price was paid. For these consumers, it is desired to provide a system by which the authenticity of a product can be confirmed to insure that what is being paid for is in fact the real thing.
It has been widely recognized by management of corporations most exposed to counterfeiting, such as, for example, manufacturers of compact disks (CDs), videos, perfumes, luxury watches, etc., that allowing the public to verify the authenticity of a product with a high degree of certainty would substantially help to mitigate damages incurred from counterfeiters.
Many ingenious anti-counterfeit schemes have been devised over the years. A typical example of a system widely used to identify a counterfeit good involves the use of seals which have traditionally been used to authenticate documents. Variations on this theme include watermarks, such as are found on some international currencies, fine prints, tiny objects attached to a product or the package such as holograms, and so on. The efficacy of such methods has dramatically decreased with the evolution of technology. Due to progress in various technologies, if the customer can recognize the “seal”, the counterfeiter usually can imitate it in such a way that the customer cannot detect the difference. For example, holographic seals verifiable by a consumer, once difficult and expensive to reproduce, are now child's play with relatively inexpensive equipment.
On the other hand, it is easy to produce seals only verifiable by the vendor. However, the cooperation of the consuming public to contact the vendor to verify the seal is a drawback. To partially overcome this difficulty, several manufacturers attach a serial number to each item. It has been proposed to improve on this method in U.S. Pat. No. 4,463,250 to McNeight et al. and in U.S. Pat. No. 5,367,148 Storch et al. For serial numbers to offer increased protection, these patents propose to use a serial number where part or all of the digits are chosen at random or generated by some secret code. The originator keeps a copy of all numbers so generated and the check of authenticity is performed by verifying that the tag of a given item carries a number on the list. Such methods also propose some partial check using a small computer. Unfortunately, these methods suffer from several drawbacks. First, the need to contact the originator is unavoidable in the prior art. In such case, a counterfeiter may saturate the communication lines used for verification and make the process inefficient. Further, the fact that a database has to be kept of all purchases creates invasion of privacy issues for consumers. For example, if the consumer pays using a credit card, it becomes easy to attach the consumer's name to the product which has been bought, often without the consent of the consumer. Moreover, the originator must keep an ever growing database and must make this database quite secure for an unforeseen amount of time. Every access to the database must be secure, and one has to make certain that no external party obtains access to the database. This of course becomes increasingly difficult the larger and more often the data base is accessed. Secondly, using a small scanner, and the help of several accomplices, a would be counterfeiter may copy huge lists of existing serial numbers if the serial numbers are visible when the product is packaged, and the public has no means by which to even partially authenticate the product prior to purchase if the serial numbers are hidden. This problem is partially due to the fact that there is not very much connection between the serial number and the product it corresponds to, i.e. the serial number does not contain enough information about the product.
Another serious problem related to counterfeiting involves so called “parallel markets”. There are two typical scenarios. In the first, stolen new goods can be reintroduced in various markets as genuine new goods, this is commonly referred to as the “black market”. In the second, sometimes referred to as the “grey market”, a producer sells on different markets having different pricing policies. An agent in a lower priced market may resell the producer's goods to an agent in a higher priced market. In both cases, the producer loses.